Strategic growth directions for the ORLEN Group's business segments
New energy: investment in renewable generation capacities as the main growth area.
Looking ahead, a key area of focus for the ORLEN Group over the next decade will be new energy, with a particular emphasis on renewables. By 2030, we aim to have more than 9 GW of installed renewable capacities in onshore and offshore wind farms and solar photovoltaic projects, both in Poland and abroad. By 2030, we expect to be a major biogas producer in Central Europe with an annual output of 1 bcm of biogas.
Petrochemicals: petrochemical capacity expansion, specialty products and recycling.
We intend to take steps to maximise petrochemical yields (from cracking, FCC, etc.). We will ramp up our capacities in olefins and other base products. We will also solidify our position in polymers – a business line with attractive growth potential – by extending the value chain and entering into compounding and concentrates. Concurrently, the share of specialty high-margin products in the Group’s portfolio will grow from 16% to approximately 25%. Recycling and biomaterials will be new branches of the petrochemical segment. By 2030, we will expand our recycling capacities (mainly in plastics) up to 0.3 million tonnes. Additionally, we plans to implement advanced circular economy technologies.
Refining: maintaining the position of a leading regional refiner with major investment into biofuels.
Until 2030, refining will remain an important segment of our business. Its transformation will be driven by energy efficiency improvements and increased crude conversion rates. Expansion of the biofuel output will be another vital driver. Within the coming decade, the Group will emerge as the region’s leading producer of biofuels, with an annual capacity of 3 million tonnes (FAME, HVO).
Retail: expansion of the retail network and non-fuel segment.
Our strategic vision is to vigorously develop the Group’s retail arm, based on the network expansion and significant additions to the retail offering. By 2030, the number of the ORLEN Group’s service stations operating throughout the region will be at least 3.5 thousand. We intend to support the development of electric mobility, including by building at least 10 thousand EV charging points by the end of the decade. Our broad, integrated offering, including electricity, natural gas and liquid fuels, will keep attracting new customer groups.
Upstream: sustainable portfolio growth, with a focus on natural gas assets.
To ensure energy security for Poland, our strategy involves continuing exploration efforts and maintaining stable levels of gas production in Poland, while also investing increased production in Norway. This strategy will result in a significant increase in gas output volumes, from 8 bcm to 12 bcm.3
Gas trading
We are committed to guaranteeing the security of natural gas supply to Poland (LNG deliveries and supply by pipelines) by maintaining a diversified range of supply sources. We will seek to maximise value from other activities, e.g. by strengthening the trading function to optimise sales margins.
Conventional power and networks: supporting stable electricity and gas supplies in Poland; investing in power generation sources and network upgrades and expansion
In an effort to reduce the carbon footprint of power and heat generation while ensuring the continuity of energy supply, we will develop a range of CCGT units to balance the Polish electric power system and replace high-emission coal-fired power plants and CHP plants. We also intend to enter into partnerships to develop and operate small modular reactors (SMR) as another potential source of zero-carbon electricity and heat. To enable the energy transition, we will upgrade and expand the electricity and gas distribution network.
Sustainable development of the ORLEN Group
The ORLEN Group’s Strategy 2030 sets the long-term objective of achieving a net zero carbon footprint by 2050. By 2030, we intend to reduce CO2 emissions by 25% (absolute emission volumes in Refining, Petrochemicals and Upstream), CO2/MWh emissions in the Energy segment by 40%, and net carbon intensity (NCI – emissions intensity of energy products sold, measured as gCO2e/MJ for all emission scopes) by 15%. The ORLEN Group intends to spend PLN 120 billion on green investments in the following areas:
- Development of renewable power generation;
- Expansion of biogas and biomethane capacities;
- Electric mobility;
- Expansion of biofuel and biomaterial capacities;
- Development of recycling capabilities;
- Development of hydrogen capabilities.
Major R&D and digital transformation projects
Pursuit of our strategic objectives will also require changes within the organisation. Over the next decade, we will spend approximately PLN 3 billion on research, development and innovation as a key area of the necessary transformation. Another essential element will be the digital transformation, driving efficiency gains in production and distribution, helping mitigate the environmental footprint and strengthening customer relations. We will put in place a new management model, tailored to the scale of the Group’s operations and taking into account the ongoing acquisition processes. We will be an organisation relying on knowledge and versatile competences, investing in talent and human capital.
Further growth from stable financial foundations
The strategy is also designed to ensure stable financial foundations for our business. Our value is built by profitable investment projects, sustainable funding sources, and a robust balance sheet. Having capped our net debt/EBITDA ratio at 2.5x, we will align the Group’s CAPEX plans with its current financing capabilities. We will rely on a balanced mix of funding sources with current cash flows supported by an additional debt capacity. We also use alternative funding sources, such as project finance, EU funding for innovation and energy transition projects, and engaging with external partners who co-fund selected projects. Initiatives aligned directly with the Group’s carbon neutrality goal are partly financed with green and sustainable bonds issued on the European capital market.
The financial effect of the strategy will be delivery of cumulative EBITDA of around PLN 400 billion by 2030. The key contributors will be Upstream, Refining, and Conventional Power and Networks (cumulative EBTIDA of PLN 80-90 billion for each), as well as the New Energy segment (PLN 50-60 billion).
Cumulative EBITDA in 2023–2030 after implementation of the strategy by business area [PLN billion]
The strategy provides for guaranteed base dividend of PLN 4 per share, to be progressively increased by PLN 0.15 each year. The final dividend amount will depend on the Group’s performance. It is expected to be set at 40% of the adjusted free cash flow (operating cash flow minus investing cash flow), but no less than the base dividend.
Dividends [PLN per share]
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